OnlyOnce is 8 years old this week, which is hard to believe. So it is fitting that I got halfway through a new post this morning, then a little alarm bell went off in my head that I had written something similar before.  The topic is around moderation versus extremes.  I first wrote about this topic in 2005 in a post called Shifting Gears but I have thought about it more recently in a different way. 

Instead of phrasing this as a struggle between “Meden Agan,” which is Greek for “everything in moderation,” and “Gor oder gornischt,” which is Yiddish for “all or nothing,” I’d like to focus here on the value of occasionally going to an extreme. And that value is around learning. Let me give three examples:

-We were having a buy vs. build conversation at work a few months back as we were considering an acquisition. Some people in the room had an emotional bias towards buy; others toward build. So we framed the debate this way:  “Would you acquire the company for $1 instead of building the technology?” (Yes!) “Would you buy it for $10mm?” (No!) Taking the conversation to the extremes allowed us to focus on a rational answer as opposed to an emotional one — where is the price where buy and build are in equilibrium?

– With my colleague Andrea, I completed a 5-day juice fast a few weeks back. It was good and interesting on a bunch of levels. But I came away with two really interesting learnings that I only got from being extreme for a few days:  I like fruits and veggies (and veggie juices) a lot and don’t consume enough of them; and I sleep MUCH better at night on a relatively empty stomach

– Last year, I overhauled my “operating system” at work to stop interviewing all candidates for all jobs and stop doing 90-day 1:1 meetings with all new employees as well. I wrote about this in Retail, No Longer. What finally convinced me to do it was something one of my colleagues said to me, which was “Will you be able to keep these activities up when we have 500 employees?” (No) “So what is the difference if you stop now and save time vs. stopping in 6 months?” Thinking about the extreme got me to realize the full spectrum

It may not be great to live at the extremes, but I find extremes to be great places to learn and develop a good sense of what normal or moderate or real is.

Response to a Deliverability Rant

Justin Foster from WhatCounts, an email service provider based in Seattle, wrote a very lengthy posting about email deliverability on the WhatCounts blog yesterday.  There’s some good stuff in it, but there are a couple of things I’d like to clarify from Return Path‘s perspective.

Justin’s main point is spot-on.  Listening to email service providers talk about deliverability is a little bit like eating fruit salad:  there are apples and oranges, and quite frankly pineapples and berries as well.  Everyone speaks in a different language.  We think the most relevant metric to use from a mailer’s perspective is inbox placement rate.  Let’s face it – nothing else matters.  Being in a junk mail folder is as good as being blocked or bounced.

Justin’s secondary point is also a good one.  An email service provider only has a limited amount of influence over a mailer’s inbox placement rate.  Service providers can and must set up an ironclad email sending infrastructure; they can and must support dedicated IP addresses for larger mailers; they can and must support all major authentication protocols — none of these things is in any way a trivial undertaking.  In addition, service providers should (but don’t have to) offer easy or integrated access to third-party deliverability tools and services that are on the market.  But at the end of the day, most of the major levers that impact deliverability (complaint rates, volume spikiness, content, registration/data sources/processes) are pulled by the mailer, not the service provider.  More on that in a minute.

I’d like to clarify a couple of things Justin talks about when it comes to third-party deliverability services.

Ok, so he’s correct that seed lists only work off of a sample of email addresses and therefore can’t tell a mailer with 100% certainty which individual messages reach the inbox or get blocked or filtered.  However, when sampling is done correctly, it’s an incredibly powerful measurement tool.  Email deliverability sampling gives mailers significantly more data than any other source about the inbox placement rate of their campaigns.  Since this kind of data is by nature post-event reporting, the most interesting thing to glean from it is changes in inbox placement from one campaign to another.  As long as the sampling is done consistently, that tells a mailer the most critical need-to-know information about how the levers of deliverability are working.

For example, we released our semi-annual deliverability tracking study for the first half of 2005 yesterday, which (download the whitepaper with tracking study details here or view the press release here).  We don’t publicly release mailer-specific data, but the data that went into this study about specific clients is very telling.  Clients who start working with us and have, say a 75% inbox placement rate — then work hard on the levers of deliverability and raise it to 95% on a sampled basis, can see the improvements as their sales and other key email metrics jump by 20%.  Just because there’s a small margin of error on the sample doesn’t render the process useless.

Second, Justin issues a big buyer beware about Bonded Sender and other “reputation” services (quotes deliberate – more on that in a minute as well).  Back in June, we released a study about Bonded Sender clients which showed that mailers who qualified for Bonded Sender saw an average of a 21% improvement in inbox delivery rates (range of 15%-24%) at ISPs who use Bonded Sender such as MSN, Hotmail, and Roadrunner.  We were pretty careful about the data used to analyze this.  We only looked at mailers who were clients both before and after joining the Bonded Sender program for enough time to be relevant, and we looked at a huge number (100,000+) of campaigns.  Yes, it’s still “early days” for accreditation programs, but we think we’re off to a good start with them given this data, and the program isn’t all that expensive relative to what mailers pay for just about everything else in their email deployment arsenal.

Finally, let me come back to the two “more on that in a minute” points from above.  I’ll start with the second one — Bonded Sender is an accreditation program, or a whitelist, NOT a reputation service.  Accreditation and Reputation services are both critical components in the fight to improve inbox placement of legitimate, permissioned, marketing emails, but they’re very different kinds of programs (a little background on why they’re important and how they fit with authentication here).

Accreditation services like Bonded Sender work because, for the very best mailers, third parties like TRUSTe essentially vouch that a mailer is super high quality — enough so that an ISP can feel comfortable putting mail from that mailer in the inbox without subjecting it to the same level of scrutiny as random inbound mail.

There are no real, time-tested reputation services for mailers in the market today.  We’re in the process of launching one now called Sender Score.  Sender Score (and no doubt the other reputation services which will follow it) is designed to help mailers measure the most critical levers of deliverability so they can work at solving the underlying root cause problems that lead to low inbox placement.  This is really powerful stuff, and it will ultimately prove our (and Justin’s) theory that mailers have much more control over their inbox placement rate/deliverability than service providers.

Where does all this lead?  Two simple messages:  (1) if you outsource your email deployment to an email service provider, pick your provider carefully and make sure they do a good job at the infrastructure-related levers of email deliverability that they do control.  (2) whether you handle email deployment in-house or outsource it to a service provider, your inbox placement rate is largely in your control. Make sure you do everything you can to measure it and look closely at the levers, whether you work with a third-party deliverability service or not.

Apologies for the lengthy posting.

In 2005, I wrote a post called Unfolding the Map in which I looked at these two seemingly opposing philosophies from successful entrepreneurs:

• If you don’t have a map, you can’t get lost
• If you don’t have a map, you can’t get where you’re going

and tried to combine them when thinking about product roadmapping. The same contradiction and combination could be applied to anything, including coaching and development.

That’s why I was excited to read my friend Matt Spielman’s new book, Inflection Points: How to Work and Live with Purpose. Matt worked at Return Path twice over the years — first as employee #3 (more on that in a minute) and then over a decade later as CMO. We live near each other and know each other’s families. I’ve been lucky enough to see his career unfold and develop into what it is today, a flourishing coaching business called Inflection Point Partners that helps clients tremendously…and that also feeds Matt’s soul.

When I first met Matt and he joined me and Jack to launch Return Path in 1999, he was fresh out of business school and focused on sales and marketing from his prior career in investment banking. Our idea was that he would do the same for us as we got our product in market. But as I started focusing more on what kind of company we wanted to build and how to get there, Matt became my leading thought partner on those topics. When we got to about 25 people, he and I created a new role for him — head of Human Capital and Organization Development. While a bit clunky, that title meant that Matt was the principal person helping me create at small scale what we later branded our People First philosophy. That philosophy and the practices we developed out of it led to 20 years of a strong track record of investing in people and helping over 1,300 colleagues grow their careers by being simple, actionable, and broad-based in the way we handled feedback and development planning. This started back in 2000.

Matt’s book puts the ethos that I saw percolating over 20 years ago into a tight framework around his coaching methodology of the GPS (Game Plan System). The book is short and sweet and walks through both the philosophy and the framework in accessible terms. And while it’s true that you have to be open to new ideas, open to serendipity, and go with flow sometimes…it’s also true that if you have specific goals in mind, you are unlikely to achieve them without a focused effort.

I’ve written a lot about coaching lately between The Impact of a Good Coach and another recent post about a strong coaching framework about intentionality in Russell Benaroya’s book. In that second post, I noted that “While I have become less and less of a life planner as I’ve gotten older under the headline of ‘man plans, God laughs,’ I am a huge believer in being intentional about everything. And that pretty much sums up Matt’s book: If you don’t have a map, you can’t get where you’re going.

Book Short: There is No Blueprint to $1B

Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, by David Thomson (book, Kindle) sounds more formulaic than it is. It’s not a bad book, but you have to dig a little bit for the non-obvious nuggets (yes, I get that growing your company to $1B in sales requires having a great value proposition in a high growth market!). The author looked for commonalities among the 387 American companies that have gone public since 1980 with less than $1B in revenues when they went public and had more than $1B in revenue (and were still in existence) at the time of the book’s writing in 2005.

Thompson classifies the blueprint into “7 Essentials,” which blueprint companies do well on across the board. The 7 Essentials are:

– Create and sustain a breakthrough value proposition

– Exploit a high growth market segment

– Marquee/lighthouse customers shape the revenue powerhouse

– Leverage big brother alliances for breaking into new markets

– Become the masters of exponential returns

– The management team: inside-outside leadership

– The Board: comprised of essentials experts

As I said above, there were some nuggets within this framework that made the entire read worthwhile. For example, crafting a Board that isn’t just management and investors but also includes industry experts like customers or alliance partners is critical. That matches our experience at Return Path over the years (not that we’re exactly closing in on $1B in revenues – yet) with having outside industry CEOs sit on our Board. Our Board has always been an extension of our management and strategy team, but we have specifically gotten some of our most valuable contributions and thought-provoking dialog from the non-management and non-investor directors.

Another critical item that I thought was interesting was this concept of not just marquee customers (yes, everyone wants big brand names as clients), but that they also need to be lighthouse customers. They need to help you attract other large customers to your solution – either actively by helping you evangelize your business, or at least passively by lending their name and case study to your cause.

The book is more of a retrospective analysis than a playbook, and some of its examples are a bit dated (marveling at Yahoo’s success seems a bit awkward today), and the author notes as well that many of the “blueprint” companies faltered after hitting the $1B mark. But it was a good read all-in. What I’d like to see next is a more microscopic view of the Milestones to $100 Million!

Startup CEO (OnlyOnce – the book!)

One of the things I’ve often thought over the years since starting Return Path in 1999 is that there’s no instruction manual anywhere for how to be a CEO.  While big company CEOs are usually groomed for the job for years, startup CEOs aren’t…and they’re often young and relatively inexperienced in business in general.  That became one of the driving forces behind the creation of my blog, OnlyOnce (because “you’re only a first time CEO once”) back in 2004.

Now, over 700 blog posts later, I’m excited to announce that I’m writing a book based on this blog called Startup CEO:  A Field Guide to Building and Running Your Company.  The book is going to be published by Wiley & Sons and is due out next summer.  The book won’t just be a compendium of blog posts, but it will build on a number of the themes and topics I’ve written about over the years and also fill in lots of other topics where I haven’t.

The catalyst for writing this book was Brad Feld.  Brad has been a friend, mentor, investor, and Board member for over a decade.  We’ve had many great times, meals, and conversations together over the years, not the least of which was staggering across the finish line together at the New York City Marathon in 2005.  Brad started writing books a few years ago, and I’ve been peripherally involved with them, first with Do More Faster:  TechStars Lessons to Accelerate Your Startup (I contributed one of the chapters) and then with Venture Deals:  Be Smarter Than Your Lawyer and Venture Capitalist (I wrote all the “Entrepreneur Perspective” sidebars).

Those are great books, and they’ve been incredibly well received by the global entrepreneurial community.  But then Brad got the bug, and now he’s in the middle of writing FOUR new books with Wiley that will all come out over the next year.  They are:

• Startup Communities:  Building an Entrepreneurial Ecosystem in Your City
• Startup Life:  Surviving and Thriving in a Relationship with an Entrepreneur
• Startup Metrics:  Making Sense of the Numbers in Your Startup
• Startup Boards:  Reinventing the Board of Directors to Better Support the Entrepreneur

These four books, plus the two earlier ones, plus Startup CEO, are all part of the Startup Revolution series.  While I’ll continue to do most of my blogging and posting here on OnlyOnce, I’d also encourage you to check out the Startup Revolution site and sign up to be a member of that community.  I’ll be doing some things on that site as well in connection with Startup CEO, and it’s a more concentrated place to post and comment on all things Startup.  In addition, we’ll be putting a bunch of add-ons to the book on that site closer to publication time.

I hope Startup CEO becomes a standard for all new CEOs.  I don’t think I have all the answers, but at least others can benefit by learning from my 13 years of successes and mistakes!  Now all I have to do is go write the darned thing.

Firsts, Still

After more than 13 years in the job, I run into “firsts” less and less often these days.  But in the past week, I’ve had three of them. They’re incredibly different, and it’s awkward to write about them in the same post, but the “firsts” theme holds them together.

One was incredibly tragic — one of our colleagues at Return Path died suddenly and unexpectedly.  Even though we’ve lost two other employees in the last 18 months to cancer, there was something different about this one.  While there’s no good way to die, the suddenness of Joel’s passing was a real shock to me and to the organization, and of course more importantly, to his wife.

The second was that I came face to face with a judge in the state of Delaware for the first time around some litigation we’re in the middle of now.  While I can’t comment on this for obvious reasons, you never think when you decide to incorporate in Delaware that a trip to a courthouse in Wilmington is in your future.

The third, which can only be described as bittersweet, is that we had our first long-time employee retire!  Now THAT’S something you never think about when you run a startup.  But Sophie Miller Audette, one of our first 20 employees going back to 2000 and the sixth longest tenured person at the company today, has decided to retire and move on to other adventures in her already rich life.  A quick search on my blog reveals that I’ve blogged about Sophie three times since I started OnlyOnce 9 years ago (as of next week).  The first time was in 2004 when I quoted her memorable line, “In my next life, I want to come back as a client.”  The second and third times were in 2005 and were about the company’s commitment to helping to find a cure for Multiple Sclerosis, which Sophie was diagnosed with almost 10 years ago now.  Sophie has been an inspiration to many of us for a long time, and while we’ll miss her day-to-day, she’ll always be part of the Return Path family.  Picture of her, me, and Anita at her “retirement dinner” earlier this week below.

I always say that one of the best parts about being in this job for this long is that there are always new challenges and new opportunities to learn and grow.  The last couple weeks, full of firsts, proved the point!

Wait – A Closed Environment Isn’t the Be All End All?

Today’s announcement that AOL will be improving its web-based email access for members and opening a free version of the service for non-members in 2005 is a quiet cry of “uncle.”  What’s amazing isn’t the announcement so much as how long it took for AOL to get there.

What will this do to the email landscape?  Not much, in my view.  It’s too little, too late, to mean much of anything.

Email Marketing 101

We just published a book!  Sign me Up! A marketer’s guide to creating email newsletters that build relationships and boost sales is now available on Amazon.com.  The book is authored by me and my Return Path colleagues Mike Mayor, Tami Forman, and Stephanie Miller.  What’s it about?

– At its core, the book is a very practical how-to guide.  Any company — large or small — can have a great email newsletter program.  They’re easy, they’re cheap, and when done well, they’re incredibly effective.

– This book helps you navigate the basics of how to get there, covering everything from building a great list, to content and design, to making sure the emails reach your customers’ inboxes and don’t get blocked or filtered.

– Our central philosophy about email marketing, which permeates the advice in the book, is covered in my earlier New Media Deal posting (which is reproduced in part in the book’s Preface) — that customers will sign up for your email marketing in droves if you provide them a proper value exchange for the ability to mail them.

– I’d encourage you to buy the book anyway, but in case you need an extra incentive, we are also donating 10% of book sales to Accelerated Cure, a research organization dedicated to finding a cure for Multiple Sclerosis, in honor of our friend and colleague Sophie Miller.

More postings to come about the process of writing, publishing, and marketing a book in 2005 — boy was the experience we had different than it would have been 10 years ago.

• A VC: Scars From The Last Bubble
  Fred has a good posting on some of the downsides of having managed through the bubble bursting. I wrote about this (a little bit) last year in Ratcheting Up is Hard to Do (/2005/01/ratcheting_up_i.html), but Fred’s posti
  (tags: Entrepreneur VC Management)

• Feld Thoughts
  Brad has a good posting today about entrepreneur accountability — along the lines of my “Forecast Early and Often” theme. — /2005/11/notsocounter_cl.html
  (tags: VC Entrepreneur)

In From the Perimeter

I’m at the Direct Marketing Association’s annual massive trade show (DMA*05) in Atlanta.  While there are lots of things to potentially blog about, I think the most interesting one is the simplest.  When I started attending the DMA’s shows six years ago, the only interactive marketeing companies who exhibited were email vendors and the occasional sweepstakes company — and any interactive marketing company who did bother to show up was relegated to a small booth space in a corner of the trade show floor, away from the real action.  A friend of mine once told me it was easy for him to hit all the email guys at DMA — just walk around the perimeter of the room.

It’s 2005, and oh how things have changed.  The DMA put the “Interactive Marketing Pavilion” center stage this year, literally in the middle of the floor.  Besides Return Path, loads of other interactive marketing companies (and not just the email and sweeps guys!) have prime real estate at the show.  Within eyeshot of our booth are fellow email companies SilverPop, StrongMail, WhatCounts, Accucast, and ExactTarget, as well as analytics companies like Omniture, online ad companies like Blue Lithium, Kanoodle, and Advertising.com, lead gen companies like Cool Savings, and even a search firm or two.

The move is more than symbolic and more than just the fact that online marketing vendors have been around long enough to bid on better booth locations (although no doubt both of those things are true).  It’s representative of the way mainstream marketers now conduct business — increasingly online and increasingly multi-channel.  Online is another important part of the mix, not the stepchild.

Online marketing firms are now in from the perimeter, and we are happy to be here!